In The AFR today I report S&P will likely upgrade the major banks' stand-alone credit profiles from single "A" to "A+" if, as expected, they boost their Common Equity Tier 1 (CET1) capital by more than 120bps. The widely-accepted new-normal for the major banks' core equity is 10% of risk-weighted assets, which is an increase of ~140bps above current levels. While S&P says the major banks' AA- "issuer" ratings, which are upgraded two notches above A on the assumption of extraordinary government support, will not change as a result of the CET1 hike, the major banks' subordinated bonds/hybrids are expected to be upgraded one notch. Specifically, S&P said "the improved stand-alone credit profiles should translate into higher ratings on the hybrid and subordinated debt instruments issued by these banks, as the starting point of ratings on these instruments is the banks' stand-alone credit profile." This means the old-style subordinated bonds (ASX: ANZHA, WBCHA, NABHB) will move up from A- to A while the new-style subordinated floaters will be lifted from BBB+ to A- (ASX: WBCHB). Read for free here (VIEW LINK)